Delhi High Court on Permanent Disablement Benefits under ESI Act.

Headnote:

The Delhi High Court dismissed the writ petition challenging the Permanent Disablement Benefits (PDB) payable under the Employees’ State Insurance Act, 1948, on the ground that such benefits are distinct from minimum wages and are intended as social security compensation for loss of earning capacity due to employment injury. The Court held that Rules 54 (non-existent), 57 & 60 of the ESI (Central) Rules, 1950, are neither ultra vires nor unconstitutional. However, the Court expressed concern over the inadequacy of PDB and recommended that ESIC and the Central Government form a committee to periodically review and recommend enhancements of PDB considering living costs, inflation, and prevailing market standards.

Background:

1. The petitioner suffered an accident on 25.06.1989 while employed at M/s Sawhney Rubber Industries, resulting in amputation of both hands.
2. PDB was awarded by ESIC at Rs. 14 per day, periodically revised, which the petitioner argued was insufficient and below minimum wages.
3. The petitioner challenged the ESIC order dated 09.09.2016 and the vires of ESI Rules 54, 57 & 60, contending violation of Articles 14 and 21 of the Constitution of India.
4. The petitioner sought enhancement of PDB to match minimum wages under the Minimum Wages Act, 1948.

Court’s Observations:

1. ESI Act is social welfare legislation providing benefits for sickness, maternity, and employment injury; PDB is distinct from wages and intended to compensate for loss of earning capacity.
2. Section 51 and Section 95 of the ESI Act vest powers with the Central Government to prescribe rates, while Section 97 allows ESIC to make regulations.
3. Post-2011 amendments define Standard Benefit Rate based on average daily wages, and PDB is set at 90% of this rate under Rule 57(3).
4. Section 99 prior to 1989 allowed ESIC to enhance benefits; post-1989, it was limited to family medical care.
5. Comparing PDB to minimum wages is conceptually and legally unsound as they serve different purposes.
6. No arbitrariness or discrimination exists; all insured persons are treated equally.
7. Reliance on Employees State Insurance Corporation, Bangalore v New Forge Company supports the position that Minimum Wages Act cannot dictate PDB under ESI.

Legal Provisions Discussed:

1. Section 51, Employees’ State Insurance Act, 1948 – Payment of benefits.
2. Section 57, Employees’ State Insurance Act, 1948 – Disablement benefits.
3. Section 95, Employees’ State Insurance Act, 1948 – Power of Central Government to make rules.
4. Section 97, Employees’ State Insurance Act, 1948 – Power of ESIC to make regulations.
5. Rules 54, 57 & 60, Employees’ State Insurance (Central) Rules, 1950 – Calculation of disablement benefits.
6. Articles 14 & 21, Constitution of India – Equality and right to life.

Decision:

1. The writ petition is dismissed; the relief to equate PDB with minimum wages cannot be granted.
2. ESIC’s PDB calculation is lawful and within statutory framework.
3. Court recommends a biennial committee to review and suggest enhancements of PDB considering cost of living and inflation.
4. No order as to costs.

Citation: 2025:DEL:9748

Case: Shri Munna Prasad v. Employees State Insurance Corporation & Anr.

Court: High Court of Delhi at New Delhi

Coram: Hon’ble Mr. Justice C. Hari Shankar & Hon’ble Mr. Justice Om Prakash Shukla

Date of Decision: 18 November 2025

Writ Petition (C) No.: 9748 of 2017